Stericycle initiated with bearish view at Wells Fargo, here’s why

Wells Fargo initiated coverage of Stericycle with an Underweight rating and $40 price target. The analyst is cautious on structural end-market headwinds and struggle to underwrite the company’s long-term 15%-17% EBITDA growth target. Stericycle’s growth model leans heavily on small quantity, typically found in private and independent medical practices, and following the pricing settlement, the pricing lever “can no longer be pulled,” the analyst tells investors in a research note. Wells believes the company should continue its portfolio rationalization journey.